Any lingering doubts on the effect of trade-war rhetoric on U.S.-listed ocean shipping stocks should have been laid to rest in the first half of August. Trade politics is clearly moving these equities – which begs the question of whether shipping stocks can break out of their lows until the conflict is resolved. On August 13, after the U.S. Trade Representative announced tariff delays on certain Chinese containerized goods, ocean shipping stocks bounced, even equities of ship owners that don't transport containers.

An increasingly common mantra among ship owners is that newbuilding orders are slowing in response to the growing pace of regulatory and technological change. According to this theory, it is more difficult to order now – and get financing for orders – because the regulations and the technology to comply with them will dramatically change within the lifespan of the vessel (commercial ships are generally depreciated for accounting purposes over 25 years). The risk of premature obsolescence equates to a residual value risk, i.e., the future resale value may be too low, undercutting the rationale for ordering.

Two examples are dry bulk, which is admittedly up off a low base, and liquefied petroleum gas (LPG) shipping, which is doing extremely well by any measure. There have recently been two positive developments for the dry bulk sector. This included a vague promise of Chinese purchases of U.S. soybeans, a commodity that is generally carried aboard Panamaxes, bulkers which have carrying capacities of 65,000-90,000 deadweight tons (DWT), and Supramaxes (45,000-60,000 DWT).

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Ocean shipping has a unique appeal to a certain breed of risk-reward investor for two primary reasons. World events are now coming to the fore in ocean shipping. The crude oil tanker market has become heavily contingent on the outcome of geopolitical tensions between Iran and the U.S., while the container market will go one way or the other based upon the outcome of trade tensions between the U.S. and China.

The Stamford, Connecticut-based company said it had a loss of 29 cents per share. Losses, adjusted for non-recurring costs, came to 22 cents per share. The liquified petroleum gas shipping company posted ...